Markets Confirm 0.5% Fed Rate Cut. 5 Things to Know About Bitcoin This Week

Bitcoin (BTC) begins an important macro week with a fierce battle towards support at $60,000.

• After a weekly close, BTC price action remains a major area of ​​interest for bullish investors.
• The price indicators show the extent of the need to reclaim $60,000. If the resistance and support lines flip here, the setup on the daily and weekly charts will improve.
• This week, the U.S. Federal Reserve took the lead by deciding how much it will cut interest rates for the first time in four years. The market is confident that will happen, but last-minute uncertainty is increasing expectations that the Fed’s moves will be more aggressive than minimal.
• Bitcoin analysts are buying time before drawing conclusions about how BTC/USD will react.
• Bitcoin dominance hits 3 1/2 year high, ETH/BTC signals tough times for altcoins

BTC Price Weekly Close Puts Bulls on the Ground

Bitcoin came under pressure on its weekly close on September 15, losing $60,000 and a significant portion of its recovery that week in the bull market.

According to data from Cointelegraph Markets Pro and TradingView, at the time of writing, BTC/USD is nearing the $59,000 mark, up 7.8% over the past week.

“Bitcoin is in for a rough week,” Mark Cullen, a popular trader and analyst, summarized in a post on X.

Cullen focuses on the week’s key macroeconomic event: the Federal Reserve’s interest rate decision scheduled for September 18.

“Stocks started the week lower and there’s a key interest rate decision coming up on Wednesday,” fellow trader Zell added.

“Until then, hold on to your current territory. Then it looks like it’s likely to go up further.”

However, Caleb Franzen, founder of Cubic Analytics, looked at longer time frames and found that both the 365-day simple moving average (SMA) and the exponential moving average (EMA) act as support levels.

“Since the initial breakout in March and April 2023, BTC has been able to sustain above its 1-year average and even turned into support several times during the recent pullback in August and September,” he wrote in a September 14 blog post.

“Could it be that Bitcoin is simply retesting its 1-year average before continuing its rally like it did in Q2 and Q3 2023? Until proven otherwise!”

Bitcoin indicators illustrate resistance barriers.

As Bitcoin bulls heat up towards $60,000, the BTC price indicator is facing a major resistance retest.

As reported by Cointelegraph, both the Ichimoku Cloud and the Relative Strength Index (RSI) are showing key levels where a reversal to support could occur.

However, the weak weekly close on both the daily and weekly timeframes is acting as a barrier to continued uptrend.

On a weekly basis, BTC/USD remains below the Ichimoku Tenkansen and Kijunsen trend lines, while the RSI is also stuck below the key 50 line.

The daily chart looks relatively better, with price above 50 but still below the Ichimoku Cloud.

As of the 3rd, our trading team, Stockmoney Lizards, is monitoring the bullish RSI divergence, which means that the price is now likely to move in favor of the bulls.

“A lot of things are pointing to a turnaround in the last two weeks of September. Uptober is coming,” he summarized.

Market bets on Fed rate cut curve

There is one event that will shape macroeconomic volatility this week: the U.S. Federal Reserve’s interest rate cut.

This is the first such move since March 2020 and will only be confirmed at the September 18 Federal Open Market Committee (FOMC) meeting, but it has nonetheless been priced into the market for a long time.

The only question is how big it will be. The debate currently centers around 0.25% and 0.5%, with the latest data from CME Group’s FedWatch tool currently suggesting the latter is more likely.

The situation is more complicated for Bitcoin. While risky assets should technically benefit from increased liquidity flowing into the market as a result of policy easing, experts are already comparing it to a crash rather than the good old days.

“While a rate cut may sound positive, it points to a deeper concern: a collapse in borrowing, spending, and investment,” Jacob King, a financial analyst and investor and CEO of cryptocurrency newsletter WhaleWire, told X followers over the weekend.

“Historically, sharp cuts have preceded recessions. Why? It shows that the government is afraid and is struggling to reverse its excessive powers.”

King specifically cited the 2008 global financial crisis as a major issue.

“The warning signs today are similar to those of 2008: rising unemployment, plummeting housing starts, declining home sales, declining economic activity. Even the federal funds rate chart looks eerily similar to 2007,” he concluded.

Some see Bitcoin’s close relationship to global liquidity conditions and its current bullish trend as grounds for optimism.

Popular trader Rickers, meanwhile, is among those preparing for a bullish BTC price reaction. He said in part of his X analysis:

“If you think the rate cut this week is somehow going to cause a BTC selloff, there is something else going on. If there was no panic in the stock market to begin with, there would be no panic. When rate cuts happen, the first cut is usually actually very bullish and is known to coincide with a price rally based on the background.”

Ricks argued that the macroeconomic situation is “very different” than in 2008.

BTC Price Trends Show a “Strange” Pattern

Since the most recent cycle low in late 2022, BTC/USD has copied history with “uncanny” precision.

This is according to Checkmate, creator and popular analyst of the on-chain data resource Checkonchain.

Checkmate uploaded a Bitcoin index activity chart to X and said that they noticed a noticeable pattern in BTC price movements since the last bear market.

BTC/USD is recovering very similarly to past cycle lows, which provides important context for the complaints about its underperformance this year.

“It’s strange. Bitcoin is at exactly the same point since its low as it was in the last two cycles,” he summarized.

“I like the cycle low comparison the most because it accounts for the psychological time it takes investors to recover from a bear market. The measure of the uptrend is not relevant, but the time frame may be.”

Checkmate noted another iteration of Bitcoin price action, which is measuring activity between halvings.

In that sense, on-chain analytics firm Glassnode shows that the current cycle is performing somewhat poorly.

Ether Drops as Bitcoin Dominance Hits 58%

Despite the slump in BTC prices, Ether (ETH) is having a tough time amid the current Bitcoin bull market.

relevant: Bitcoin rally to $60,000 has increased trader interest in FET, SUI, AAVE, and INJ.

As ETH/BTC hits multi-year lows, data shows relative weakness for the largest altcoins.

The pair is currently depressed at levels not seen since April 2021, hitting a new low of 0.0387 on September 16.

Alex Thorn, head of research at Galaxy Research, noted that Ethereum has fallen more than 50% since its merger two years ago.

As a result, Bitcoin’s share of the total cryptocurrency market cap continues to increase.

On September 16, it hit a new all-time high of 58.07%, making it the most “Bitcoin-centric” cryptocurrency market in three and a half years.

“I expect Bitcoin’s dominance to peak in this space,” predicted Michael van de Poppe, a cryptocurrency trader, analyst, and entrepreneur.

“It all depends on $ETH, but given current sentiment it looks close.”

Nonetheless, Van de Poppe sees both altcoins as having “bottomed out,” and predicts Bitcoin itself could hit a new all-time high as soon as next month.

“Gold is making new ATHs and I expect Bitcoin to follow suit,” he wrote in another X post, referring to recent gold prices.

“New ATH in October.”

This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.